US industrial output on the rise

http://news.bbc.co.uk/go/rss/-/1/hi/business/8201935.stm

Version 0 of 1.

US industrial production rose 0.5% in July, stronger than expected and the first rise in nine months.

The jump in production from America's mines, factories and utilities was helped by a 20.1% rise in production of motor vehicles and parts.

Car sales were helped by the "cash for clunkers" schemes, which offers incentives to buy new cars.

Consumer prices were flat on the month but fell 2.1% over the past 12 months, the biggest decline since 1950.

This decline reflects the fortunes of the oil price, which has fallen dramatically since its peak in July last year.

Analysts interpreted both sets of data as a sign that the economy may be picking up.

"It's something to be optimistic about, it's another sign that we may be turning a corner," said Terry Morris at National Penn Investors Trust company of the inflation data.

The jump in industrial production was led by a rebound in car production as manufacturers such as Chrysler and General Motors reopened plants they had shut earlier in the year.

Car companies have also been helped by a government aid programme.

Under the terms of the programme, which has been dubbed "Cash for Clunkers", Americans are being offered up to $4,500 if they scrap their old cars or trucks and exchange them for new, more fuel-efficient vehicles.